Apple was accused of restricting its competitor third-party mobile wallet app developers from accessing the necessary NFC input on iOS, to benefit its own mobile wallet Apple Pay
Mobile Payment using Payment Terminal. (Credit: Jonas Leupe on Unsplash)
The European Commission (EC) has sent a ‘Statement of Objections’ to Apple, over its alleged anti-competitive practices related to NFC chip technology for payments.
Apple’s mobile wallet solution Apple Pay uses Near-Field Communication (NFC) technology to enable iPad and iPhone users to make contactless (tap and go) payments in physical and online stores.
The Commission accused Apple of restricting its competitor third-party mobile wallet app developers from accessing the necessary NFC input on iOS, to benefit Apple Pay.
Its preliminary review concluded that Apple is misusing its dominant market position in the smart mobile devices and mobile wallet markets to kill the competition.
If confirmed, the allegations would breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) which prohibits the abuse of a dominant market position.
European Commission competition policy in charge Margrethe Vestager said: “Mobile payments play a rapidly growing role in our digital economy. It is important for the integration of European Payments markets that consumers benefit from a competitive and innovative payments landscape.
“We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices.
“In our Statement of Objections, we preliminarily found that Apple may have restricted competition, to the benefit of its own solution Apple Pay. If confirmed, such a conduct would be illegal under our competition rules.”
In June 2020, EC has initially opened a formal antitrust investigation against Apple, to investigate the company’s compliance with EU competition rules in connection with Apple Pay.
The Commission concluded that Apple Pay is the only mobile wallet solution with access to NFC input on iOS, whereas other third-party mobile wallet app developers are restricted.
According to the EU regulator, NFC technology is standardised, available with most of the payment terminals in stores, and facilitates safe and easy mobile payments.
It primarily considers that Apple’s decision to reserve access to NFC technology on its operating system iOS only to Apple Pay restricts the competition.
Apple’s conduct with respect to Apple Pay poses an exclusionary effect on competitors and limits the consumer choice for mobile wallets on iPhones, said EC.